Exercises · Q8
Q.Distinguish between equity shares and preference shares.
Puducherry TnboardTextbookSubjectiveImportance★★★★★
29% · 8/28 Questions
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →| Basis | Equity Shares | Preference Shares |
|---|---|---|
| Nature of dividend | Variable — depends on profits and board decision | Usually fixed rate |
| Priority of payment | Paid after preference shareholders (residual claimants) | Paid before equity shareholders, both for dividend and on winding up |
| Voting rights | Carry normal voting rights | Ordinarily no voting rights |
| Risk and return | Higher risk, higher potential return | Lower risk than equity, more moderate/fixed return |
| Redemption | Generally not redeemable (permanent capital) | May be redeemable or irredeemable, as specified at issue |
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.